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Himachal to go for re-bidding in Kinnaur hydropower project

Shimla, April 23 IANS | 2 years ago

The Himachal Pradesh government Tuesday decided to go for re-bidding of a multi-million dollar hydropower project that is currently under litigation between the Netherlands-based Brakel Corp. and Anil Ambani-led Reliance Infrastructure.

The cabinet, presided over by Chief Minister Virbhadra Singh, also decided to reject the representation of both the companies to re-allot the 960-MW Thopan-Powari-Jangi project in Kinnaur district to them, a government spokesperson told IANS.

Brakel Corp. had challenged in the Supreme Court an earlier ruling of the Himachal Pradesh High Court, which Oct 7, 2009, ordered cancellation of the allotment of the project to it on a petition filed by Reliance Infrastructure, one of the bidders.

"We allow the writ petition and quash the decision of the council of ministers dated Nov 25, 2008, as being arbitrary, illegal and irrational," the high court then said.

Subsequently, the state government decided to invite fresh bids for the project. It even decided to forfeit the company's upfront premium of Rs.280.69 crore (USD 60 million) deposited with the government for delaying the implementation of the project.

The state government signed an agreement with Brakel in 2008, two years after the project was awarded to the Dutch company, for starting the pre-construction activities for the project.

The government, as per the agreement, is entitled to get 12 percent free power from Brakel. The project requires an investment of more than USD 1,300 million.

The spokesperson said the government would now go for fresh bidding of the project as per state's amended power policy in 2008.

Under the new policy, the bidder who offers more free power to the state in addition to the fixed quota is allotted projects.

The fixed quota is 12 percent free power for the first 12 years, 18 percent up to 30 years, and 30 percent up to 40 years. After 40 years, the project will be handed over to the government.

The free power bidding is in addition to the fixed upfront premium of Rs.2 million (Rs.20 lakh) per megawatt.

Official sources said the delay in the project is costing Rs.250 crore annually to the state government. This amount could be earned by the government by selling 450 million units provided free by the company.

A recent assessment done by the State Infrastructure Development Board (SIDB) to evaluate the loss to the government due the delay in commissioning of the project was around Rs.1,400 crore, an official said.

The Thopan-Powari-Jangi hydropower project is aiming to generate 4,000 million units per year.

Himachal Pradesh has abundant water resources, with five major rivers flowing down the slopes of the Himalayas. The state's power generation potential is 23,560 MW, about 25 percent of India's total hydropower potential.

Currently, 7,913 MW of hydropower has been harnessed by the central and state governments, private players and joint venture companies.